Home prices continued to rise across the country in August 2015 as the economy improves and housing demand outweighs supply.
The S&P Dow Jones Indices released its results of for the S&P/Case-Shiller U.S. National Home Price Index (HPI) Tuesday, showing that home prices experienced year-over-year gains of 4.7 percent in August compared to a 4.6 percent increase in July.
According to the index, which covers all nine U.S. census divisions, the 10-City Composite rose 4.7 percent in the year to August compared to 4.5 percent in July, and the 20-City Composite’s year-over-year gain was 5.1 percent, up from 4.9 percent in July.
Among the cities with the highest year-over-year increases were San Francisco, California and Denver, Colorado with home prices gains of 10.7 percent and Portland, Oregon with a gain of 9.4 percent. The HPI report also found that fifteen cities had greater year-over-year price increase in August 2015 compared to July 2015.
On a month-over-month basis, the index rose 0.3 percent in August prior to seasonal adjustment. The 10-City Composite and 20-City Composite increased 0.3 percent and 0.4 percent month-over-month, respectively. After seasonal adjustment, the index rose 0.4 percent from the previous month, while the 10-City and 20-City Composites both increased 0.1 percent.
"Home prices continue to climb at a 4 percent to 5 percent annual rate across the country,” said David M. Blitzer, managing director and chairman of the Index Committee for S&P Dow Jones Indices.
Blitzer also noted that other housing indicators have shown strength recently:
- Housing starts topped an annual rate of 1.2 million units in the latest report with continuing strength in both single family homes and apartments.
- The National Association of Home Builders sentiment survey, reflecting current strength, reached the highest level since 2005, before the housing collapse.
- Sales of existing homes are running about 5.5 million units annually with inventories of about five months of sales.
- September new home sales took an unexpected and sharp drop as low inventories were cited as a possible cause."
"A notable part of today’s economy is the continuing low inflation rate; in the year to September, consumer prices were unchanged," Blitzer concluded. "Even excluding food and energy, the core inflation was 1.9 percent. One result is that a 5 percent price increase in the value of a house means more today than it did in 2005-2006, the peak of the housing boom when the inflation rate was higher. The rebound from the recent lows was faster than the 1997-2005 housing boom, and also much less driven by inflation."
View the full report at: https://www.spice-indices.com/idpfiles/spice-assets/resources/public/documents/252950_cshomeprice-release-1027.pdf?force_download=true